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    Hospitals are shifting to a retail model—will doctors follow?

    More hospitals today are competing for patients using retail strategies, such as offering flat-rate, easy-to-compare bundled pricing, finds a new PwC report.

    As a result, physicians with high fees may find themselves shut out of hospital contracts. And that means less patient volume and less revenue.

     

    Related: Should your practice have a blog?

     

    It's a scenario that drew some big 'a-ha's' from doctors at last year’s Medical Group Management Association national conference, says Cheri Kane, managing director at PwC's Health Research Institute, and one of the lead authors of a 2016 report on health systems' shift toward more price transparency: Price check in the MRI aisle: Hospitals adopt a retail approach to win customers.

    Doctors were surprised to find out that even if they were employed by the health system, they wouldn’t be chosen as part of a bundled pricing partnership, says Kane. Hospitals are picking partners based not only on their good outcomes but also how competitively they are priced.

    Doctors may not be used to having to think in competitive price terms, but as the PwC report points out, the landscape is evolving. Hospitals and health systems are increasingly making prices more transparent and accessible to consumers. Other strategies include offering money-back guarantees, price quotes, and easier-to-understand billing.

    One big driver for these changes: the rising use of high-deductible insurance policies, which have left consumers paying larger percentages of their health costs than ever before. The Kaiser Family Foundation reports that average annual deductibles have jumped almost 50 percent since 2011, to about $1,500.

    Insurers also are "actively directing their members to lower-cost providers," the PwC report notes, and providing provider price guides for consumers. Most states today are mandating that price information for procedures and services be made available for consumers, usually via data collected from payers and hospitals.

     

    Further reading: 7 tips to stop technology from damaging the patient experience

     

    So far, only a handful of states—including Florida, Massachusetts, South Dakota and Minnesota—require physicians to provide timely estimates upon request. But more states are considering proposals for this, says the Health Care Incentives Improvement Institute in its 2016 price transparency report card.

    "Physicians are not thinking about the price transparency regulations that are coming into play, and they're not thinking how it's going to directly affect their practice," warns Kane.

    Next: “As physicians, we really struggle with this"

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